Frost Mortgage Banking Group Glossary of Terms

Subdivision

A housing development that is created by dividing a tract of land into individual lots for sale or lease.

Step-Rate Mortgage

A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years), resulting in increased payments as well. At the end of the specified period, the rate and payments will remain constant for the remainder of the loan.

Standard Payment Calculation

The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.

Special Deposit Account

An account that is established for rehabilitation mortgages to hold the funds needed for the rehabilitation work so they can be disbursed from time to time as particular portions of the work are completed.

Single-Family Properties

One- to four-unit properties including detached homes, townhomes, condominiums, and cooperatives.

Settlement Sheet

See HUD-1 statement.

Settlement

See closing.

Servicing

The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Servicer

An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.